The ELECTRICAL PROPOSAL

Taranaki Daily News, 19 July 1929, Page 6

The ELECTRICAL PROPOSAL

(To the Editor.)

Sir,—Permit me to congratulate the enterprising persons who have had sufficient public spirit to form a ratepayers’ association to investigate the Power Board’s claims. From some of the observations made at the inaugural meeting, it would seem that the Poa er Board views with some surprise and distress the formation of this association when, actually, if their case is as strong as members of the board would wish us to believe it is, they should be pleased at the opportunity of having their policy examined. The truth of the matter, I would venture to say, is that numbers of assertions made by the Power Boaid from the commencement of the negotiations right down to the present time have created in the minds of numbers of thinking people a good deal of wonderment and alarm. Mr. Pacey, at the ratepayers’ meeting, staled'quite blandly that the offer of” £67,000 was made simply for the purpose of causing a breach, and enabling the Power Board to go to arbitration. As I understand the position, the company’s statute, which gave the board power to purchase, contemplated arbitration as a last resort, and this I suggest would have been the desire of the people hud they been consulted. It now turns out, however, that the Power Board made no attempt to offer a price anywhere near the real value of the company’s undertaking, and thus made no concrete effort to effect a private purchase. The result is that the Power Board, on its own figures, has spent £6500, and I assume that the company has spent just as much, if not more. The expenditure by the company, just as much as by the Power Boaid, represents a loss to the people of Tai ana.ki of over £12,000. But the position is worse than that because Mr. Bone stated definitely in the newspaper, when the offer of. £67,000 was made, that the price had been carefully considered by the board’s experts and .was an eminently fair and reasonable price. This, it would seem (if Mr. Pacey’s admission is correct) was not the case, and the ratepayers were hoodwinked into believing that the board was doing everything it could to effect a private* s settlement. Is it any wonder then, that people who understand business deals should view with alarm the acceptance without demur of the policj of a board which in the past has shown so little real business acumen? Now, coming to the board’s policy, Mr. Bone hopes for a revenue of £33,000, or an increase in revenue ovqp that of the company of about £6000! In order to get that increased revenue, an annual expenditure, of approximately £31.000 is stated to be necessary, leaving a very small margin for unforseen circumstances —even assuming they get the revenue they expect. The company, on the other hand, with a revenue of £26,000. makes an annual profit of approximately £9OOO after setting aside a liberal fund for depreciation of the assets. On Mr. Bone’s own figures, then, we find that, in order to get this additional £7OOO gross revenue, the whole of the £9OOO profits disappears. Moreover, in the estimate of expenditure, Air. Bone states that he has allowed the same amount for general running expenses as that shown to have been expended by the company, whereas Air. Pacey quite frankly admitted at the ratepayers’ meeting that they would need to spend more to collect more, and this is surely obvious, as a Power Board with a £200,000 capital cannot hope to be run for the same annual cost as an £BO,OOO concern. In conclusion, I would say that, in ' view of the spirited way the company 1 opposed the Power Board at the arbi--1 tration, I fully expected that the com- ■ nanv would continue to fight the boaid > up to the poll. Instead of that it has offered no resistance whatever. The ! ratepayers would do well to consider the • question of why is the company mak- > imr no effort to retain its undertaking? • Surely the answer must be that it recognises that it is getting a wonderful price for its undertaking, including a huge sum for goodwill, and is sitting with open lap for the plum to drop into it. —I am, etc.. “SPOTLIGHT.” Hawera, July 18.